The Minister for Agriculture, Joe Walsh, and the Turf Club senior steward, Gerry Scanlan, will meet within the next 48 hours to discuss the possibility of an independent arbitrator examining the contentious issues in the proposed merger of the Turf Club and the Irish Horseracing Authority.

Even before the crowd of over 2,000 people gathered yesterday morning at the front of the Curragh stands to protest to the Turf Club at their unwillingness to merge into one ruling body, Horseracing Ireland, in return for increased funding for prize money from the Government, significant behind-the-scenes negotiations had taken place.

Yesterday morning the Minister replied to a Turf Club letter sent on Monday proposing an independent aribtrator to determine the nature and extent of the regulatory functions in Irish racing.

"Joe Walsh said he was looking to meet the senior steward and he was pleased at the tone of the letter we sent on Monday. He wants to discuss the contents of the letter," the Turf Club chief executive, Brian Kavanagh, said yesterday.

An Department spokesman commented: "The Minister is happy with the positive Turf Club response and he wants to act on that. He wants to finish the issue as quickly as possible and a meeting with Gerry Scanlan is the best way to go about that. He wants to meet as soon as possible, hopefully within the next couple of days."

It will be the first time that Scanlan, the ex-chief executive of Allied Irish Banks, and Walsh will have met face-to-face, although Scanlan did meet the Minister for Finance, Charlie McCreevy, on two occasions earlier this year.

It was confirmed yesterday that the former Fianna Fail Minister for Finance and EU Commissioner, Ray McSharry, will accompany Scanlan when he meets Walsh. It's not clear yet who might be agreeable to both sides as an independent arbitrator, but the possibility of a High Court judge taking the role was not discounted.

"We've a long way to go down the road," said Kavanagh, "but although the Turf Club's role in making and enforcing the rules of racing must be `ring-fenced', the other aspects of the registry office would be open to arbitration." He also emphasised that the earlier concession from the Department of Agriculture that forensics and dope testing would remain part of the Turf Club's brief had been significant.

"The Minister moved his position on what was a significant issue for us and the idea of an arbitrator had been floating around already. When the Minister said last week we had reached an impasse, the Turf Club members felt it was time to look at the arbitration issue," Kavanagh said.

Kavanagh reported that almost 40 speeches had been made by the various Turf Club members at the their meeting yesterday, during which the large crowd had gathered outside.

"It was a very full attendance and there was significant support for the stewards. The room was unanimous in its support for this action we are taking," Kavanagh said. "Certain people commented on the dispute, but we all regret things have come to this."

Earlier, a joint statement from associations representing owners, stable staff, jockeys, trainers and breeders said that if the Turf Club didn't agree to a merger, they should step aside.

"Should the Turf Club fail to respond positively to this call the representative organisations will request the Government to immediately introduce legislation to establish a new regulatory entity prepared to work in co-operation with the rest of the racing industry," the statement said.

There was some surprise from the various groups who were later told that the mechanics of the surprise move had taken place even before the industry march had assembled at the Curragh in the morning.

The chairman of the trainers association, Willie Mullins, commented: "We're not happy that an independent arbitrator has been asked for at this late stage. The body of racing has spoken today."

Mullins did, however, express satisfaction with the prospect of Ray McSharry's involvement in negotiations.